Fed holds rates steady, upgrades assessment of economic growth
The Federal Reserve on Wednesday again held benchmark interest rates steady amid a backdrop of a growing economy and labor market and inflation that is still well above the central bank's target.
In a widely expected move, the Fed's rate-setting group unanimously agreed to hold the key federal funds rate in a target range between 5.25%-5.5%, where it has been since July. This was the second consecutive meeting that the Federal Open Market Committee chose to hold, following a string of 11 rate hikes, including four in 2023.
The decision included an upgrade to the committee's general assessment of the economy. Stocks gained immediately following the decision.
The post-meeting statement indicated that «economic activity expanded at a strong pace in the third quarter,» compared with the September statement that said the economy had expanded at a «solid pace.» The statement also noted that employment gains «have moderated since earlier in the year but remain strong.»
The gross domestic product expanded at a 4.9% annualized rate in the third quarter, stronger than even elevated expectations. Nonfarm payroll growth totaled 336,000 in September, well ahead of the Wall Street outlook.
There were few other changes to the statement, other than a notation that both financial and credit conditions had tightened. The addition of «financial» to the phrase followed a surge in Treasury yields that has caused concern on Wall Street. The statement continued to note that the committee is still «determining the extent of additional policy firming» that it may need to achieve its goals. «The Committee will continue to assess additional information and its implications for monetary policy,» the statement said.
Wednesday's decision to stay put
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